Heating and Ventilating

The UK’s largest housebuilder, Taylor Wimpey has slapped its shareholders with a £1.5bn loss and cancelled its interim dividend.
Taylor Wimpey, making its interim announcement on August 27, said nearly 50% of the loss was due to the company cutting the value of its land assets in the UK, US and Spain.

The company said profits for the first half of 2008 had fallen from £119.8m to £4.3m.

Writedowns and goodwill adjustments totalled £1.51 billion with write-down of landbanks in the UK, North America and Spain totalling £690 million

After writing down the value of land, Taylor Wimpey is in talks with banks to avoid breaching loan terms.

Norman Askew, chairman said: “The first half of 2008 has been characterised by the very challenging trading conditions in the UK, US and Spain. The Group is engaged in constructive dialogue and is not aware of any issues which would prevent these amendments being finalised by the end of this year.”

The company said it is keeping tight control of investment in land and work in progress and taken early action to reduce overhead costs in the UK. It said its previously announced closure of 13 of its 39 operating businesses will be complete by the end of September

The company said “The restructuring of our UK Housing operations, which reduces the number of operating businesses from 39 to 26, accounted for the majority of an exceptional cost of £40.2 million. We expect to achieve annualised savings of £45 million per annum as a result of these actions'.

“We have also taken the decision to write off the entire value of our intangible assets, which includes goodwill and the George Wimpey brand at a total non-cash cost of £816.1 million. This is a result of the weak trading conditions that we are experiencing in each of our major markets”.

Taylor Wimpey was formed in 2007 following a merger of Taylor Woodrow and George Wimpey.